Why Do Intelligent People make wierd Real Estate Decisions

Hi All I have been a member of this forum for quite some time now and have observed some very interesting trends in real estate which are reflective of our general life fundamentals. We are the coke loving, Levi's wearing generation who like everything to be handed out on a platter. Common examples are when people post one line in a forum "Any idea about XYZ project or builder." If you have interest in a project then at least call them ask for rates, view site plan of the web site and post your thoughts. We are like sheep in most cases following the latest trends and being fooled by marketing honchos who get paid in lakhs to fool us. Some common observations I made are given below.

Having Houses close of Offices: We have been led to believe the having houses near IT parks, office complexes, is very good so these areas should be highly priced. You spend 8-10 hours in office and the rest at home. So home is typically a place where you relax and spend quality time with family. Thats what you work so hard for. :) Your child should be able to play around your house without fear of excessive traffic, pollution, noise, etc. All these factors are negated when you buy houses near major office destinations. You have to satisfy with an 10 X 10 garden with one swing where everyone can play. Unless its like Magarpatta which has been planned well its not worth paying so much to live close to your office. I am scared of what will happen in Wakad. One narrow road which cannot be extended will lead to Hinjewadi Phase 1,2, and 3. The traffic, strain, and noise on the road will be tremendous.

Buying Houses Based on Assumed Appreciation:: Most property dealers tell us we will get great value for houses when we sell them years later. What about its value today? Most builders use this tactic to cover up lack of basic amenities near their projects today. Kharadi and Wagholi are prime examples. Builders are signing at prime rates without basic amenities while they promise the world in future. Kharadi, does not have water, roads are yet to be build, no street lights yet beefed up rates because its close to where your office could be, and it will have tremendous appreicataion in future :). Houses in Kharadi and Wagholi houses should be bought on what they are today rather than what it could be 10 years down the line. If you want to buy it for the future rate should be justifiable around 2000 maximum. I have nothing against Kharadi, Wagholi, Hinjwadi etc, but i just want to emphasize that buy the house for a right reason, and not on trends, false promises and market jargon.

Paying tons of money for useless amenities I see so many people asking for houses with standard amenities such as swimming pool, gym, club house etc. The quality of such amenities is pathetic and we end up paying prime rates for them. Take my own example. I have paid for 1400 sqft where my carpet and terrace area is 1100 sqft. At 2400 per sqft i have paid Rs 7 Lakh extra to builder for things i may not use for most of my life. I could have paid the same amount to the best health club in Pune for lifetime family membership with facilities such as large size pool, tennis, SPA, etc. Builders make tons of profit from such ventures and we do not use most of these sub standard facilities. I loved the house and had no choice but to buy it for personal reasons. Also all builders give these amenities now, so you cannot do much. All I am saying is that dont let builder con you into the belief that he is doing a favor on you by giving you such things. You are paying big bucks for it.

Treating Real Estate as an Investment: I have observed only two kinds of people make money in real estate. The first kind of people are those who are plainly lucky. 99% people come in this category. No one knew, Pune was going to go bang like this. So guyz who had been living here and following parental advice about buying houses have made their money. This trend has started and should finish now. The current rates make it foolish to consider real estate investment. Remember the US market slump did not lead to real estate slump. Excessive inflation in real estate prices was one of the reasons why the market fell. India has gone through its growth phase and now we will see the stabalization. Some Tier 2 cities will grow like Pune but Pune has seen the 100% appreciation. Its totally foolish to expect another 100% jump. The second type of people who make money on real estate are ones who do not follow trends and do lot of research to invest in real estate. These people did not follow trends but relied and solid research and instinct and had a very good idea about how changes impact real estate and economy. It better to learn about the financial management and then decide where you want to invest your money. Avoid investing everyone around you does it.

Buying houses with exorbitant finishing because builder provided Italian, Spanish finishing. Builders are trying to sell houses at not so good localities and pricing them at exorbitant prices because flashy interiors. One walk in Home Town in Ishaniya should dispel the myth. Great flooring, awesome bathrooms, amazing doors, will cost you 10L at the maximum. Thats when you buy the best available in the market and own a decent sized 3 BHK. When you compare this to difference in rates the difference is startling. Normal project cost upto Rs 15-20L lesser and the quality of stuff in the posh house is not even half of what you can buy for 10L you are spending. In most cases the location determines the price and thats how it should be. Better for buy a 3 BHK in a decent locality and spend some money on it to develop it. Sorry if I was too preach but I hate the fact that intelligent people who do awesomely well in life can make some foolish decisions in real estate.

that's right. it is a highly subjective choice. a few people may like listening to audio books or music for two hours a day in their cars, and some people may like to spend that time with their family. i am not too sure what you mean by homely environment. why can't areas like baner, aundh pashan offer homely environment for the people who work in hinjewadi? maybe if you can compare two suburbs, that will get your point across. i think branding their choices as weird is a little harsh.

Hi Buddy

Baner and Pashan and Aundh do offer a homely environment. The only few areas i felt a little uncomfortable with are Kharadi, and Wakad and its a very personal choice. I am sorry if anyone feels offended but it was never my intention. I am sure Kharadi will be a booming place in the next 5 years but i like to stay away from all the noise surrounding booming areas.. I do not have the authority or the arrogance to say XYZ area is not fit for living. I just said its not my cup of tea and developers abuse this perception of it being a IT area by giving ridiculous rates.

As long as you want to live in that area its no issue at all. Most times some people get carried away by the fact that it is an IT area and houses will have good appreicaition. The point of the article is to make us question our own assumtions on what a good house for us means and not go by standard builder jargon.

Now for meaning for homely: I was brought up in Delhi in a goverment socitey where each group of buildings has big lawn where children play cricket and other games. Roads were not brimming with cars and no one was shouting at us for making noise. I think the formative years of children are very important. If we coop them up at home because we can be close to office i think its unfair on them.

The basic point of this article is just to make people question some of the jargons builder throw at people. Everyone has the right to chose what's best for them. Apologies to anyone who has been offened. :(

I made a small conclusion here:- People treat countryside as traveling for 2 hrs. Well, that's not the case. E.g. My traveling consist mostly to SB Marg, University Rd. & Deccan, which are easily accessible from Baner. I can reach University circle in 20 mins flat. Similarly, it offers good connectivity for Mumbai, I need not cross any part of city at any given point. Hence, I my purchase of house will be towards Baner.

It has been over 4 months since I traveled towards Magarpatta, though I take Vimannagar route from Bund Garden while going out of station via Nagar Rd. The old peth areas are never in my list.

Areas like Baner, Pashan, Bavdhan may not command the 'wow' factor (I don't believe in this) as that of Boat Club Road or Koregaon Park. Few of my freinds do stay here, but I never visit them during evenings. Reason:- Traveling on North Main Rd. (I hate the bridge which connects Kalyaninagar to KP as this is the sole reason to make this North Main Rd. a nuisance, all the peace has been lost)/ RB Road (Pune Station) is like testing your patience. I better drive for 2 hours on open roads than drive for 1/2 Hr in stop & go traffic, because the fatigue you get by driving in city for 1/2 Hr is much more than driving for 1-2 Hrs on open roads. Better to spend 1Hr of quality time with family than spend 2Hrs saying huh...huh due to the fatigue.:p

Some of you who are married & have kids may have an issue of schools but I there are plenty of good schools in suburbs too:- Loyola,Orchids, DPS, etc. Some Sharad Pawar International school is also there in east Pune, if I am right.

Of course there are some who have asyndrome of 'Heart Of the City' (see what happens to them in Ganeshotsav festival! Some go to stay at their relatives place too!:D).

I may be biased for not liking to stay in heart of city locales but right from my childhood, I was used to staying away from prime city limits, which I really enjoy & I feel that the quality of residence which you get at suburbs is far superior than that of old city limits, though currently not comparable with that of countries like Canada, US.

Real, you took it wrong buddy....Here nobody is saying is that they want to stay in the heart of the city, the real question is that wether we should stay near our office or should stay where your family likes or get better facilities in & you might have to travel 1-2 hours to ur office for that....My take on this is that, in Pune I have not seen any society which has a playground where our children can play Cricket or football (which we used to do when we were children)...In most of the society I only see a place of 20X20 sq ft as children play area....which has been shared between at least 100 families (flats) & in some case its more than that like 400-500 flats (you can take example of Comfort zone in Balewadi for this case), so I dont think that our children can get those facilities (playground) which we used to get & I dont think ppls bother for that also, coz I have seen most of the ppls here discussed abt the flat which hardly have a play area for children....Most of the ppls see what Bath fitting we are getting or whether we are getting vitrified tile/ Marble flooring in our drawing room...

I like the Township concept like Magarpatta or nanded City, but I hardy see anybody discussing those projects...I wish , somebody(some good builder) come with some township project of around 50 acers or more, somewhere in Baner/Balewadi area :)

Real, you took it wrong buddy....Here nobody is saying is that they want to stay in the heart of the city, the real question is that wether we should stay near our office or should stay where your family likes or get better facilities in & you might have to travel 1-2 hours to ur office for that....

I like the Township concept like Magarpatta or nanded City, but I hardy see anybody discussing those projects...I wish , somebody(some good builder) come with some township project of around 50 acers or more, somewhere in Baner/Balewadi area :)

Ash, the fact is that the offices are mostly located in CBD areas. Hence, the statement. Btw, those working in industry don't have to bother much but those who work in both simultaneously, need to calculate these factors.

As far as townships (near to Baner) are concerned, there are:- BR, Megapolis & to some extent Ekta Worldsville (what is the status of this project?), but being in primary stages, it doesn't make it livable right now, nor would it do so for next atleast 5-8 years. Except for Magarpatta, no township is worth. Look at Amanora. For end use, many would prefer MP City than Amanora due to completion & that's the problem with townships. The best thing is to have home & office both in suburbs:), though it may not be possible for all.

Yeah, I agree that Township takes time to build...But I think that wait is worth... obviously you can not build thousands of flat in a year or two...So, if you have patience then I think its better to wait for a township to come up & stay there....

Abt BR & Megapolis (they both are delayed to start due to the recession in the market), But,The way Hinjewadi is Developing ( as almost around 1 lacs ppls are working currently & I think they gonna at least double in next 4-5 years) not only in IT, but we have now Bio tech Park in hnijewadi & SEZ as well, so I think BR & Megapolis will be good place to live in next 4-5 years...so, if one can wait that long & working in Hinjewadi then I think BR & Megapolis would be good option for them...And now Megapolis is offering flat at reduced rate...It was attractive rate to me as I work in Hinjewadi & I like their concept...But I think I should wait one more year to see the status of whole project b4 venturing into it :)

yea, the definition of home varies according to the age, cultural background, attitude, lifestyle, ambitions, ......

thats simply because the definition of various aspects that make a home also varies. For e.g. - for some people the safety or security at home strictly demands video entrance, skilled security personnel at the gate etc. For a few others its more about the sorrounding areas and social elements around. there's nothing right or wrong here.

defenition of peace and bliss at home is many. There are folks who always need and like neighbours talking aloud & playing, then there are folks who like a quiet home.

then the amenities - children park, pool, clubhouse, ....well, if these amenities are scalable to the entire population in the society and are well maintained then its excellent. Otherwise i agree its just a checkbox depending upon how you perceive it. But if having that amenity can make the buyer happy, let him be. Its like women's gold and diamond jewellery, never call them not intelligent. you will learn the lesson the hard way :D

Thats what I said in my last post. In the India-setup, everything is made for masses. If you want to choose and follow your own dream home then you might need to sacrifice the little dreams of people in your family. If they can understand and think like you then you might be able to follow your dream. Otherwise you need to be a Suresh Kalmadi or Bhosale. Just see their homes in Baner near the hills.:)

the same applies for schools as well. Do you think our childern have the freedom and space in the schools in Pune? You might call out one or two schools with bigger playgrounds, classrooms with not more than 30 students, interesting teachers etc. But mostly its another checkbox whether its CBSE or ICSE, do some xyz magazine rate them as amongst top-10, and other populace in your IT firm are sending them in the same school.

I totally agree with you when you say that people have the right to make their own decisions. But, you would be surprised when you ask people why the made a particular choice, the responses are so stereotypical.

We think we are making a choice but in most cases its already made up for us. Take the case of buying a Jeans. 90% people are under the assumption that they are making an intelligent choice by buying Levis over Lee. But both cost you 1500-2000. Both made in China for 5% of the cost. Both are sold in US for 20-30 USD so approx same price as India while their lifestyle is way ahead of us. These compnies try to play on the Indian ego of people paying through nose to have their individual style. Unless we concisously avoid videshi brands, who are ripping us off, we only have an illusion of choice. We are being ripped of either which way. Problem is our ego never allows us to admit we are being manipulated. My point is if we have a choice why are we so alike. Try visiting a theatre and checking out people with similar age group around you. Chances are most of them would be dressed and be carrying s of exactly similar brands. So where is the choice my friend ?:)

Same problem is with real estate. Be it GK group, Pride Purple, Rohan group, Kolte Patil, etc we have no choice. They all are fleecing us. Unless you buy land and construct house.. not too much you can do. Of course some builders are marginally better than others.. but honestly after 2 years research to find my house.. i realized only marginal difference. Thats why I say intelligent people who make awesome decisions at work, are mostly just following the bheed and janta is choices of clothes, real estate, etc..

Hi akssenti, I think we are more or less saying the same thing here. The only thing is about who are you really calling intelligent:). Folks with great IQ ? or with folks who have good EQ as well ?

For some, house is just like a lodging place where one comes just to sleep! This is more in case of DINK (Double Income No Kids) families. For them, what matters is the distance from workplace more than the total ambiance of the house & surroundings.

Yes, as said by my fellow members here, that it is more than just RE. Personally, I can do without a single neighbor, but this may not be the case with others. Some give lots of emotional value to house, some give little while for some, it may not matter at all!

So, at the end of the day, it is just a matter of perception, but definitely buying due to peer pressure is a big no-no.